Meralco
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The Manila Electric Company (PSE: MER and MERB), also known as MERALCO, is the Philippines' largest distributor of electrical power. The word MERALCO, is an acronym for Manila Electric Railroad And Light COmpany, which was the company's original name from 1903 to 1919.
MERALCO is the Metro Manila's only electric power distributor and holds the power distribution franchise for some 22 cities and 89 municipalities, including the whole of Metro Manila and Mega Manila region.
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[edit] Early History
The city of Manila already had electricity since 1892, provided by La Electricista, the Philippine's first electric company. The company built a central power plant on Calle San Sebastian in 1895, and along with street lighting, had close to 3,000 residential customers by the end of its franchise.In 1903, the Manila Municipal Board granted to a Detroit entrepreneur named Charles M. Swift the franchise to construct and operate an elctric street railway system for light, heat and power in Manila and suburbs. On March 14, 1903, Charles Swift incorporated that would become known as the Manila Electric Railroad And Light Company (MERALCO). For the next 100 years until present, Meralco furnished this City and suburbs its electric service. And for the first forty years of the same century, Meralco provided its area with its first and only modem rapid mass transportation system.
[edit] 105th Year Anniversary
Meralco is now 105 years which it started since 1903. Meralco celebrates its anniversary every 16th of March at the Meralco main center at Meralco Ave. Pasig City, Philippines. Employees come together for a week of events made by the CEO and Chairman, Mr. Manuel M. Lopez.
[edit] American Occupation and Pre-War History
On October 20, 1902, the Second Philippine Commission began accepting bids to operate Manila's electric tramway, and by extension, providing electricity to the city and its suburbs. Detroit entrepreneur Charles M. Swift won the bidding by default as he was the sole bidder and on March 24, 1903, was granted the original basic franchise of Meralco.
In 1904, Meralco acquired both the Compañía de los Tranvías de Filipinas, a firm that operated public transportation and ran Manila's horse-drawn street railways, and added La Electricista. Construction on the electric tramway began that same year. In addition to acquiring La Electricista's Calle San Sebastian power plant, Meralco built its own steam generating plant on Isla Provisora which powered the streetcar system and eventually also the electric service. By 1906, Meralco's yearly power output capacity was around eight million kWh.
[edit] Public Transportation
Meralco built up a strong public transportation business in the decades leading up to World War II, building a 170-strong fleet of streetcars into the 1920s, before switching over to buses later in that decade.
The company operated a 52 mile tram transport from 1903 to the World War II. The equipment and tracks of the system was severely damaged during the war and had to be removed.[1]
[edit] Power Generation and Distribution
By 1915, electricity generation and distribution became the main Meralco's main income generator, overtaking its public transportation operations in terms of revenue. In 1919, it changed its official name to Manila Electric Company. By 1920, the company's power capacity had grown to 45 million kWh.
In 1925, MERALCO, was acquired by the utility holding company Associated Gas and Electric or AEGCO (reorganized as General Public Utilities Corporation or GPU in 1946), which had begun a massive expansion throughout the United States and Canada. With AGECO's financial backing, MERALCO began acquiring a number of existing utility companies in the Philippines, enabling the company to expand beyond its Manila city center base.
By 1930 MERALCO completed construction of the Philippine's first hydroelectric power plant, the 960-kilowatt Botocan Hydro Station. At the time, this plant was one of the largest engineering projects in Asia and constituted the largest single private capital investment in the Philippines. The additional capacity allowed the company to begin hooking up customers throughout the metropolitan area.
[edit] Retail Enterprises
To drive demand for more power, Meralco also opened a retail store in order to sell electric home appliances.[citation needed]
[edit] World War II
During Greater East-Asia War, the Japanese Occupation Forces forcibly transferred all of Meralco's assets and holdings to the Japanese controlled Taiwan Power Company. By the end of the war, most of the former Meralco operations had been destroyed.
[edit] Post War Reconstruction (Nationalist Era)
After WWII, MERALCO's autobus franchise was sold to Halili Transport. In 1962, Don Eugenio López, Sr. acquired MERALCO and it finally became Filipino-owned. In buying Meralco, Don Eugenio demonstrated his belief that Filipinos could manage businesses even better than Americans. During 1962-72, he increased MERALCO's power generating capacity five times.
[edit] Martial Law Period
In 1972 President Ferdinand Marcos both instituted martial law in the Philippines and issued Presidential Decree No. 40 which forcibly nationalized the country's electric generation and transmission.
Don Eugenio Lopez, Sr., who owned Meralco at the time, had both his sons kidnapped by the government who were released to force Don Eugenio to hand over his business empire. The regime arrested his son Eugenio Lopez, Jr. (better known as Geny) on trumped-up charges of conspiring to assassinate the president. With his son held hostage, Don Eugenio was forced to give up his holdings in a group of companies worth several hundred million dollars, but Geny was not released from prison.
By decree, the ownership of the company was stripped away from the López family and placed under a shell company called the Meralco Foundation, Inc., controlled by crony under the newly-created, government controlled Napocor.
By 1978 all of the Philippines' major power plants, including most notably those previously owned by MERALCO, were owned and operated by NAPOCOR. Control of the Meralco corporation itself was seized by the Marcos Dictatorship, but was returned to its prior owners after the People Power Revolution by President Corazon Aquino. She also enacted an executive order that allowed the company to directly compete with NAPOCOR.[2]
[edit] 2008 Legislative investigation on high power rates
Meralco is facing a Philippine legislative inquiry/investigation for alleged excessive pricing.[3] The government has considered a plan to take over Meralco, to reduce electricity bills. Meralco and National Transmission Corporation (Napocor) blamed each other for the high power rates.[4] Meralco also blames high power generation costs, high transmission costs and government taxes imposed on the electricity sector from power generation to distribution. Government Service Insurance System (Philippines) President Winston Garcia, however, blamed Meralco's inefficiency, its "bloated bureaucracy" and its sourcing of power from independent power producers (IPPs) also owned by the Lopezes, and the need to amend the Electronic Power Industry Reform Act of 2001. Oscar Lopez, said that if GSIS would buy the shares of Meralco, they must buy in whole cash. Many businessmen also say that taking over Meralco is not the way to reduce electrical price. It depends on the government and the president. As other people say, this issue is only to hide the ZTE NBN scandal and other more issues.[5]
[edit] System Loss Advertisment
The First Philippine Holdings presented an advertisment about the System Loss which many of the Meralco Costumers are wondering about. Abs-Cbn's famous starJudy Ann Santos tells what is System Loss. She tells that the electricity distribution is like when you buy a pack of ice. Already melted when it comes to home. The details about that is not told in the ad. The electricity is produced to the power plants. 58% of your electric bill amount goes to the Generation Charge component. The kilowatts that is given to your home is 2000+. When it is distributed to another component, it is minimized and minimized until it gets to your home less than 1000 kilowatts. Now it is now distributed to the Transmission. The wires in this System transport the bulk power produced by the Generating plants to the different electric utilities.. Of your total billing amount, 12% goes to the Transmission Charge Component. These Charge component adds more kilowatts so that it is still 2000 kilowatts when it goes to your home. 8% of your bill are the System Loss, Taxes and Universal Charges. Based on the April 2008 billing, all of them are now 10%. The last is Distribution. The system has several conductors or wires that serve as passageways for power to flow from the substation to the costumer. 12% goes to the Distribution charge (Meralco charges include distribution, supply, metering component.) In the advertisment, Judy Ann says that all Services company like Veco (Visayas Electric Company), PLDT (Philippine Long Distance Telephone) and more have also System Loss. Many Philippine people really does not know what is all about this.
[edit] See also
[edit] External links
[edit] References
- ^ Lexis Nexis (1974). Mass Transit. PTN Pub. Co, 58. Retrieved on 2008-06-15.
- ^ Bello, Walden; Marissa De Guzman, Mary Lou Malig, Herbert Docena (2005). The Anti-development State: The Political Economy of Permanent Crisis in the Philippines. Zed Books, 293. ISBN 1842776312. Retrieved on 2008-06-15.
- ^ GMA NEWS.TV, House panel begins probe into high power rates
- ^ Abs-Cbn Interactive, Meralco, Napocor point fingers on high power rates
- ^ Abs-Cbn Interactive, High power rates blamed on Meralco, gov't, IPPs
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